Number one reason Start ups fail
We, thankfully, have a lot of businesses that come to us and are start ups.
It is very enticing to work for yourself and be your own boss.
The lure of making your own money and potential for growth is a strong draw for the entrepreneurial spirit.
However, What can go wrong?
Points to consider.
Sure there are many start up guides and templates for business plans, and cash flow forecasts.
The more business astute even factor in running costs for the first six months.
But, the main reason that we see for a start up failing is…….
The lack of a worse case scenario that would include an allocation for your own personal expenses.
So many times, people develop the plan and have financially accounted for all business costs and an estimated customer growth that is prudent, but have planned with every penny of their personal money included as capital.
The main thing when starting a business is to prepare a personal cash flow. Decide how much money you need to live on for at least 9 months……. say $4,000 per month for 9 months = $36,000. Then make sure to take this out of the equation of capital available to the company. Because believe me, it won’t be available and you will end up trying to draw what little profit you might have made to spend on personal expenses.
Start up a business by all means, but please start with what you will need to live on, especially if it is the only income for your household.
If you need help with Business Plans or just how to structure your start up for the best tax advantage, call us (813) 283-0642.
We will do our best to try and ensure your Business Succeeds!